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From January 1st 2014 FSC will introduce a revised Annual Administration Fee Policy (FSC-POL-20-005 V2) for all certified companies within the FSC system. The Annual Administration Fee (AAF) was established to support FSC’s core functions and services for, the Certificate Holders (CH), and has not been adjusted since 2008.

In return, FSC certified companies can expect a greater level of engagement at the national, regional and international level, particularly in the areas of management and further development of the FSC multi-stakeholder governance system; maintenance of the global system of FSC policies and standards, and information about these; global and local communications and marketing, including collaboration with commercial partners; trademark management and protection; maintenance and further development of the FSC dispute resolution system and government and civil society advocacy.

Modest increases for the large majorityMost FSC certified companies will face a modest increase in the Annual Administration Fee (AAF), which they pay through their Certification Body as part of their annual FSC certification audit.

You will find an overview of the adjusted fees here: ic.fsc.org/aaf_revision.

The majority of FSC certified companies will face a modest increase in the range of $50 to $400 additional fee yearly. Some companies in higher turnover categories will face higher increases, while others – smallholders and communities – will face very minimal increases in fees to encourage further certification and engagement.

Responding to your company’s needsThe rationale behind the revision of the AAF policy is two-fold:

1. An increased demand for services from certified companies; and

2. FSC’s desire to accommodate these requests at a national, regional and international level.

Additional income from this revision will primarily support the existing Network Partners and investment in new countries where FSC must secure a strong local presence. This will be accompanied by a system of accountability and performance-based indicators necessary in the development of one global organization to fulfill the FSC mission.

Local strategic investmentFSC’s model for distributing funds within the organization will also change. Unlike previous models for the collection and distribution of AAF fees, the new approach will ensure that a fixed percentage of fees collected in a country stays within that country to support local, regional and international activities. In other words, certified companies will experience a more direct relationship between their AAF fee and the amount of particularly local and regional engagement they can expect from their national and regional representatives.

In addition, FSC will also invest in managing certification risks in globally important countries, and to build momentum in undeveloped or underdeveloped markets around the world, particularly in the tropics.

Change requested by the membersThis strategic financial review was called for by FSC members at the General Assembly in 2011. In implementing this request, the FSC Secretariat engaged the management consultancy team of Price Waterhouse Coopers (London) and Sustainability, Ltd.

As PwC/Sustainability confirmed, strong national and regional offices are key factors to FSC’s model of multi-stakeholder engagement, leading to continued growth in responsibly managed forests worldwide. Among a wide variety of important activities, our national and regional offices support and manage the development of FSCs forest management standards, conduct marketing and promotional activities, assist commercial partners in expanding their purchasing and sales of FSC products, provide trademark protection, engage in government and civil society advocacy, and act as the front offices for FSC worldwide.

Furthermore the study underlined that FSC needs to channel more funds into local market development, build capacity locally, regionally and internationally, and increase focus on risk management in insecure markets. Improving performance and delivery in these three areas will therefore be the main focus for FSC going forward.

One process among many to create a stronger FSCThe revision of the AAF policy is one of several processes being carried out within FSC, all of which have the goal of building a stronger certification system equipped for future challenges. The primary goal of the new AAF policy is to enable FSC to bring greater value to certificate holders through enhanced engagement and market development at the national regional and international levels.

“We hope that changes to the AAF policy and the internal restructurings of the FSC organization will be received well by you and our other valued stakeholders. We realize, that the FSC system is undergoing a great deal of change at the moment, but all of these changes are designed to transition FSC into a more robust and responsive certification system that you can rely upon. Rest assured, we will work hard to find a solution that will be agreeable to all and in the end bring a stronger and more integrated FSC organization to the benefit of both you and forests around the globe.”, says Kim Carstensen, Director General, FSC International.